BY TOBY GOOLEY, MANAGING EDITOR
THIRD-PARTY LOGISTICS
strategicinsight
Some of the best-known
venturing into the supply
chain consulting arena.
Are they up to the job?
duty
logistics service providers are
double
WHEN MACY’S, THE GIANT DEPARTMENT STORE CHAIN, WANTED TO REDUCE ITS
lead times for imports from Asia and trim warehouse inventories, it hired a consultant to help
it figure out how to do that. The consultant recommended that Macy’s implement a high-veloc-ity, fully automated store-level distribution process supported by an electronic data interchange
(EDI) platform. Key elements of the solutions included applying bar codes at the origin warehouse to eliminate manual receiving processes; leveraging volumes and equipment to improve
utilization; and cross-docking at the destination. These and several other steps slashed cycle time
by a two full weeks and made it possible for Macy’s to redirect shipments in transit. They also
saved the retailer more than $11 million annually in transportation and logistics costs.
What’s unusual about this story—aside from the impressive savings—is the type of consultant that Macy’s hired. Instead of bringing in a traditional consulting firm, the retailer worked
with Maersk Logistics Supply Chain Development, the consulting arm of Maersk Logistics, a
third-party logistics service provider (3PL). Unlike traditional consultancies, which typically
deal in ideas, this one (along with its parent company) also implemented its recommended solutions and now operates the distribution centers and information systems.
The Macy’s-Maersk relationship is not unique. A number of large 3PLs offer supply chain and
logistics consulting services. UPS Supply Chain Solutions was among the first; others include
Ryder System Inc., DHL Exel Supply Chain, and APL Logistics.
Why are 3PLs getting into the consulting arena? Often it’s because customers ask their service
providers to redesign the logistics networks they operate. “The longer you perform well for a
customer, the more they push you into other areas that may stretch beyond what you can do,”
says Greg Aimi, director of supply chain research for AMR Research.
Another reason, says Dick Armstrong, chairman of the research and consulting firm
Armstrong & Associates, is that a lot of 3PLs would rather implement a solution of their own
design than carry out a plan developed by an outside firm. If 3PLs do the consulting project
themselves, moreover, they’re much more likely to get the operational part of the business. In
short, it gives them control over the entire process, from idea through implementation and con-
